4:15pm: Chipmakers enjoy strong day
The Dow closed Thursday up 141 points, 0.4%, at 32,859, the Nasdaq Composite added 87 points, 0.7%, to 12,013 and the S&P 500 improved 23 points, 0.6%, to 4,051. The small-cap Russell 2000 index slid 3 points, 0.2%, to 1,769.
The indexes closed higher for the second-straight day, and the S&P hit its highest level since March 7 during the session.
The Cboe Volatility Index, Wall Street’s so-called fear index and a projection of how turbulent the S&P 500 will be over the next 30 days, declined back to 19 after reaching 30 in the middle of March.
Chip stocks did especially well, as the VanEck Vector Semiconductor ETF climbed 1.4% on, bringing its year-to-date gain to more than 28%. Advanced Micro Devices stock increased nearly 2% to $97.88.
12.05pm: Weekly jobless claims rise while 4Q GDP data revised lower
US stocks were higher in noon trading as weekly jobless claims increased and fourth quarter GDP data was revised downward, sparking investor hopes the Fed will pause its rate-hiking moves.
At midday, the Dow gained 36 points to 32,754, while the S&P 500 added 18 points at 4,046 and the tech-heavy Nasdaq rose 81 points to 12,007.
“Collectively, financial markets are pricing in the best of both worlds – a recession that allows rates to be low and brings inflation down sharply, yet one that does not have a massively negative effect on corporate earnings,” Barclays analyst Ajay Rajadhyaksha wrote in a note.
Notable movers included shares of Bed Bath & Beyond Inc, which sank 18% after the retailer warned again that it may need to file for bankruptcy as it proposed a $300 million stock offering.
9:35am: 4Q GDP revised down
US stocks rose at the open on Thursday as investors digested new economic data while fears over the health of the banking sector have faded.
Just after the market opened, the Nasdaq had added 0.8% at 12,017 points, the S&P 500 was up 0.6% at 4,053 points, and the Dow Jones had gained 0.5% at 32,878 points.
On the data front, US fourth quarter gross domestic product (GDP) was revised down to a 2.6% increase. This was a 0.1% decrease from the 2.7% figure reported in February, with analysts expecting 4Q GDP would be unrevised.
BRI Wealth Management portfolio manager Tom Hopkins noted that, despite the downgrade, 4Q GDP was still a solid showing amid rising interest rates and elevated inflation.
“However, in comparison to the quarter before, 4Q 2022 did show signs that the US economy was losing momentum with business spending slowing and consumer spending posting the lowest growth since 1Q 2022,” Hopkins said.
Meanwhile, the number of Americans filing for unemployment benefits rose modestly last week, demonstrating the continued strength of the labor market despite tightening credit conditions.
Unemployment claims increased from 191,000 to 198,000, slightly above the consensus expectation of 196,000.
Pantheon Macroeconomics chief economist Ian Shepherdson said the seasonal patterns pointed to a dip in claims but the shift in the weather - with the past two weeks colder than usual, the first back-to-back chilly spell since late November - was always likely to exert a bit of upward pressure.
“The level of claims remains extremely low, but the cycle bottom probably is now in the past, and looking ahead, the lagged impact of the surge in layoff announcements ought to drive claims substantially higher during the second quarter,” he said.
6:30am: Inflation the next test
Wall Street is expected to open higher as worries about the banking system continue to recede and investors turn their attention to the latest US GDP data, to be released today, and the Federal Reserve's preferred measure of inflation, due out on Friday, for further direction.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.5% in Thursday pre-market trading, while those for the broader S&P 500 index also gained 0.5%, and contracts for the Nasdaq-100 added 0.3%.
Big tech shares led gains on Wednesday, pushing the Nasdaq Composite 1.8% higher to 11,926. The DJIA closed up 1% at 32,718 and the S&P 500 rose 1.4% to 4,028.
Amazon.com shared rose more than 3%, while Meta and Netflix each added more than 2%. Semiconductors also shone, with Micron stock rising more than 7% after the chipmaker reported its fiscal second-quarter figures, despite a $1.4 billion inventory write-down. Following the report, peer Nvidia climbed 2%, and AMD added 1.6%.
“Another day without any unwelcome banking surprises lifted markets as investors headed back towards a risk-on approach,” commented Richard Hunter, head of markets at interactive investor. “Technology shares were a particular area of buying interest and have seen gains in anticipation of hopes that the interest rate hiking cycle may be nearing its end."
With today’s second GDP reading expected to confirm the US economy expanded by 2.7% in the fourth quarter of 2022, the next economic test comes on Friday, with the release of the Personal Consumption Expenditures index, Hunter noted.
“The general expectation is for the number to have moderated further, although still remaining at levels which will suggest that the Fed’s aim of taming inflation has not quite yet been achieved," he added. "That being said, if the recent banking turmoil has resulted in tighter lending conditions from banks, this effect of further crimping growth could play to the Fed’s advantage in bringing the end of the hiking cycle in plain sight.”